The first time homebuyer share of home purchases jumped to 37.2 percent last month from 34.4 percent in October as mortgage rates shot higher, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey released today.
“The recent surge in interest rates has made potential homebuyers nervous,” explained Thomas Popik, director of the HousingPulse survey, in a release.
“If rates go up much more, then a good percentage of them will no longer qualify for the properties they want. As a result, they’re making bids on homes and quickly closing before their rate locks expire.”
Meanwhile, current homeowners looking to buy new properties are having difficulty selling their existing properties.
The market share of current homeowners fell to 42.9 percent from 44.2 percent of home purchase mortgages.
And investor activity continued a two-month decline, with investment property purchase transactions falling to 19.9 percent from 21.4 percent last month.
In September, they peaked at 22.3 percent, a 15-month high.
But the large inventory of distressed properties is making investors skittish, as many flippers are now being forced to rent out their properties before turning them around.